Changpeng WanKey Developments
- Haipaike IPO launches despite 20B yuan debt burden and plunging GMV
- CTO Xiao Jiantao (肖建涛) mortgages personal property for emergency funding
- Small-town mothers constitute >80% of user base but spending declines
- Self-operated business now 77.7% of revenue but crushes margins
- 24B yuan preferred shares threaten redemption crisis pre-listing
Delivery Difficulties Shadow Listing
Yangtuo Technology Inc., operating as Haipaike, enters Hong Kong’s IPO arena bearing the weight of crumbling business metrics and a 20-billion-yuan debt mountain. The maternal e-commerce platform once rode the ‘small-town mom’ phenomenon to stardom, but its core demographic now shows alarming spending fatigue. Recent months saw consumer complaints multiply regarding counterfeit infant formula and undelivered orders – problematic signs for a company banking on trust-sensitive maternal products.
The Small-Town Promise Frays
Core Demographic Concentration
Haipaike’s positioning remains exclusively dependent on lower-tier cities where small-town mothers comprise over 80% of its transactional buyers. Yet this claimed stronghold shows troubling fissures:
- Active buyers shrank 9.6% YoY to 94,000 in 2024
- Platform GMV collapsed 26% in two years to 110B yuan
- Digital platform revenue (90% margin stream) dropped 35%
Revenue Contradictions
The shift toward self-operated business presents a double-edged sword. While self-operated sales grew to 8B yuan (77.7% of income), this segment operates at just 15% margins versus digital’s 90%. Consequently, overall gross margins plunged from 43.9% to 32.5% since 2022.
Financial Precariousness
Preferred Shares Domino Effect
A 24-billion-yuan convertible redeemable preferred stock liability haunts Haipaike’s balance sheet. These instruments blend debt and equity characteristics:
- Investors demand $24M repayment ahead of listing
- Redeemable if founders default or VIE structure fails
- Seven triggering conditions create Sword of Damocles risk
Emergency Cash Measures
With operating cash flow bleeding 2.5B yuan over three years and bank loans surging to 137M yuan, Haipaike resorted to extreme financing. CTO Xiao Jiantao mortgaged personal property alongside spousal assets and subsidiary holdings – unprecedented for Chinese tech executives.
Sector Squeeze Intensifies
Demographic Reality Bites
China’s birth decline presents existential challenges:
- Newborns plummeted from 14.7M (2019) to 9M (2023)
- JD Maternal reported 250M users and 20% order growth
- TikTok/Social commerce redefines discovery pathways
Vertical Platform Disintegration
The specialized e-commerce model faces extinction with:
- Mia’s maternal platform closure
- Kaola shutting operations unnoticed
- Former Alibaba employee confirmation: ‘Small portals inevitably fold into giants’
Leadership Pedigree vs Market Reality
Founder Zhao Chen (赵晨), architect of Tmall Global, assembled Alibaba veterans including tech chief Xiao Jiantao. Yet pedigree proved insufficient against:
- Employee costs slashed 34.6% for marginal profitability
- Self-operation requiring heavy inventory (+101% YoY to 150M yuan)
- Increased impairment risks on maternal goods
Survival Hinge Point
Success with Haipaike’s IPO prescribes navigating vicious cycles of debt management, trust restoration among small-town mothers, and revitalizing platform energy amidst self-operating necessity. Should Hong Kong investors balk, Alibaba’s prestigious spinout risks becoming China’s latest ‘glorious failure’ among vertical players. Ultimately, survival demands demonstrating enduring relevance to the diminishing – yet invaluable – small-town mother demographic.
The Road Ahead
For industry watchers, Haipaike’s journey offers critical lessons about:
- The capital risks of demographic-targeted tech ventures
- Self-operated pivots crushing vertical platform economics
- Personal executive exposure during funding crises
The Hong Kong listing represents far more than market entry – it’s a referendum on whether specialized e-commerce retains viability against commodity giants.
